EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*hb0398*
HOUSE BILL 398
C5, P2, Q7 5lr0850
CF SB 316
By: Delegate Charkoudian
Introduced and read first time: January 16, 2025
Assigned to: Economic Matters
A BILL ENTITLED
AN ACT concerning 1
Abundant Affordable Clean Energy – Procurement and Development 2
(AACE Act) 3
FOR the purpose of requiring each electric company in the State to submit to the Public 4
Service Commission by certain dates plans for the construction or procurement of 5
distribution–connected energy storage devices and to construct or procure the 6
devices in accordance with the plan; providing for the creation of zero–emission 7
credits by beneficial nuclear facilities; requiring the Commission to pursue certain 8
coordinated approaches to offshore wind energy transmission development; altering 9
the requirements for a certain transmission system analysis and the scope of certain 10
transmission proposals that the Commission may evaluate; repealing a certain draft 11
solicitation requirement; requiring that certain alternative compliance fees be paid 12
into a certain escrow account rather than into the Maryland Strategic Energy 13
Investment Fund; requiring that renewable energy credits be procured in a certain 14
order; establishing the Utility–Scale SREC–II Program and the Small Solar 15
Facilities Incentive Program for the creation of SREC–II credits; establishing certain 16
processes and requirements for the procurement of certain front–of–the–meter 17
transmission energy storage devices and certain credits from certain solar, 18
hydroelectric, and land–based wind energy generating systems; requiring the 19
Commission to establish and the Maryland Energy Administration to supervise a 20
certain escrow account; authorizing certain units of State government to issue 21
certain competitive sealed bids for projects that are higher than the amount 22
authorized for small procurements; authorizing the Chief Procurement Officer to 23
approve certain procurement contracts; altering the distribution of sales and use tax 24
revenue attributable to certain data centers; altering the distribution of franchise 25
tax revenue attributable to certain data centers; and generally relating to the 26
procurement and development of clean energy resources. 27
BY repealing and reenacting, with amendments, 28
Article – Public Utilities 29 2 HOUSE BILL 398
Section 7–207(b)(1), 7–216(a), 7–704.3(a), (b), and (e)(2), 7–704.4(e), 7–705(b), and 1
7–709(b) 2
Annotated Code of Maryland 3
(2020 Replacement Volume and 2024 Supplement) 4
BY adding to 5
Article – Public Utilities 6
Section 7–216.2; 7–231 through 7–235 to be under the new part “Part III. 7
Zero–Emission Credits”; 7–701(m–1), 7–709.2, and 7–709.3; and 7–1201 8
through 7–1221 to be under the new subtitle “Subtitle 12. Energy 9
Procurement” 10
Annotated Code of Maryland 11
(2020 Replacement Volume and 2024 Supplement) 12
BY repealing and reenacting, without amendments, 13
Article – Public Utilities 14
Section 7–701(a) and (m), 7–704.3(c), 7–704.4(d), 7–709(a), and 7–709.1(a) 15
Annotated Code of Maryland 16
(2020 Replacement Volume and 2024 Supplement) 17
BY repealing and reenacting, with amendments, 18
Article – State Finance and Procurement 19
Section 13–102(a) 20
Annotated Code of Maryland 21
(2021 Replacement Volume and 2024 Supplement) 22
BY adding to 23
Article – State Finance and Procurement 24
Section 13–117 25
Annotated Code of Maryland 26
(2021 Replacement Volume and 2024 Supplement) 27
BY repealing and reenacting, without amendments, 28
Article – State Government 29
Section 9–20B–05(a) 30
Annotated Code of Maryland 31
(2021 Replacement Volume and 2024 Supplement) 32
BY repealing and reenacting, with amendments, 33
Article – State Government 34
Section 9–20B–05(e) and (i–1) 35
Annotated Code of Maryland 36
(2021 Replacement Volume and 2024 Supplement) 37
BY repealing 38
Article – State Government 39
Section 9–20B–05(g–1) and (i) 40 HOUSE BILL 398 3
Annotated Code of Maryland 1
(2021 Replacement Volume and 2024 Supplement) 2
BY repealing and reenacting, with amendments, 3
Article – Tax – General 4
Section 2–1201 and 2–1303 5
Annotated Code of Maryland 6
(2022 Replacement Volume and 2024 Supplement) 7
BY adding to 8
Article – Tax – General 9
Section 2–1302.5 10
Annotated Code of Maryland 11
(2022 Replacement Volume and 2024 Supplement) 12
BY repealing and reenacting, without amendments, 13
Article – Tax – General 14
Section 11–239(a)(1), (2), and (5) 15
Annotated Code of Maryland 16
(2022 Replacement Volume and 2024 Supplement) 17
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 18
That the Laws of Maryland read as follows: 19
Article – Public Utilities 20
7–207. 21
(b) (1) (i) Unless a certificate of public convenience and necessity for the 22
construction is first obtained from the Commission, a person may not begin construction in 23
the State of: 24
1. a generating station; or 25
2. a qualified generator lead line. 26
(ii) If a person obtains Commission approval for construction under 27
§ 7–207.1 of this subtitle OR SUBTITLE 12, PART II OF THIS TITLE, the Commission shall 28
exempt a person from the requirement to obtain a certificate of public convenience and 29
necessity under this section. 30
(iii) Notwithstanding subparagraph (i) of this paragraph, a person 31
may not apply to obtain a certificate of public convenience and necessity for construction of 32
a qualified generator lead line unless: 33
1. at least 90 days before the filing of an application for a 34
certificate of public convenience and necessity, the person had in good faith offered the 35 4 HOUSE BILL 398
electric company that owns that portion of the electric grid in Maryland to which the 1
qualified generator lead line would interconnect a full and fair opportunity for the electric 2
company to construct the qualified generator lead line; and 3
2. at any time at least 10 days before the filing of an 4
application for a certificate of public convenience and necessity, the electric company: 5
A. did not accept from the person a proposal or a negotiated 6
version of the proposal under which the electric company would construct the qualified 7
generator lead line; or 8
B. stated in writing that the electric company did not intend 9
to construct the qualified generator lead line. 10
7–216. 11
(a) (1) In this section the following words have the meanings indicated. 12
(2) (i) “Energy storage device” means a resource capable of absorbing 13
electrical energy, storing it for a period of time, and delivering the energy for use at a later 14
time as needed, regardless of where the resource is located on the electric [distribution] 15
system. 16
(ii) “Energy storage device” includes all types of electric storage 17
technologies, regardless of their size, storage medium, or operational purpose, including: 18
1. thermal storage; 19
2. electrochemical storage; 20
3. [virtual power plants ] THERMO–MECHANICAL 21
STORAGE; and 22
4. hydrogen–based storage. 23
(3) “Investor–owned electric company” means an electric company that is 24
not a municipal electric utility or an electric cooperative. 25
7–216.2. 26
(A) IN THIS SECTION , “ENERGY STORAGE DEVIC E” HAS THE MEANING 27
STATED IN § 7–216 OF THIS SUBTITLE. 28
(B) (1) THE GENERAL ASSEMBLY FINDS AND DE CLARES THAT THE 29
STATE HAS A GOAL OF R EACHING 150 MEGAWATTS OF DISTRIB UTION–CONNECTED 30
ENERGY STORAGE DEVIC ES. 31 HOUSE BILL 398 5
(2) ON OR BEFORE JULY 1, 2025, AND ON OR BEFORE JULY 1, 2026, 1
THE COMMISSION SHALL NOTI FY EACH ELECTRIC COM PANY OF ITS PROPORTI ON OF 2
THE GOAL ESTABLISHED UNDER THIS SUBSECTIO N, BASED ON THE ELECTRIC 3
COMPANY’S SERVICE LOAD. 4
(C) (1) ON OR BEFORE NOVEMBER 1, 2025, AND ON OR BEFORE 5
NOVEMBER 1, 2026, THE COMMISSION SHALL REQU IRE EACH ELECTRIC CO MPANY 6
TO DEVELOP AND IMPLE MENT A PLAN TO ACHIEVE THE PROPORTION OF 7
DISTRIBUTION–CONNECTED ENERGY STO RAGE DEVICES NECESSARY TO REACH THE 8
ELECTRIC COMPANY ’S APPORTIONMENT OF T HE GOAL STATED IN SU BSECTION (B) 9
OF THIS SECTION. 10
(2) ON OR BEFORE MARCH 1, 2026, FOR PLANS SUBMITTED BY 11
NOVEMBER 1, 2025, AND ON OR BEFORE MARCH 1, 2027, FOR PLANS SUBMITTED BY 12
NOVEMBER 1, 2026, THE COMMISSION SHALL : 13
(I) EVALUATE EACH PLAN ; 14
(II) ACCEPT PUBLIC COMMENTS ON E ACH PLAN; AND 15
(III) ISSUE AN ORDER FOR EAC H PLAN THAT EITHER : 16
1. APPROVES THE PLAN ; OR 17
2. APPROVES THE PLAN WI TH MODIFICATIONS THA T 18
THE COMMISSION CONSIDERS NECESSARY. 19
(3) THE ENERGY STORAGE DEVICES CONSTRUCTED OR PROCURED 20
UNDER EACH PLAN SHAL L INCLUDE A COMBINAT ION OF DEVICES OWNED BY THE 21
ELECTRIC COMPANY AND DEVICES OWNED BY A T HIRD PARTY, WITH NOT MORE 22
THAN 30% OF THE DEVICES BEING OWNED BY A THI RD PARTY. 23
(4) (I) THE ENERGY STORAGE DE VICES THAT ARE CONST RUCTED 24
OR PROCURED UNDER A PLAN SUBMITTED BY NOVEMBER 1, 2025, SHALL BE 25
OPERATIONAL BY AUGUST 1, 2027. 26
(II) THE ENERGY STORAGE DE VICES THAT ARE CONSTRU CTED 27
OR PROCURED UNDER A PLAN SUBMITTED BY NOVEMBER 1, 2026, SHALL BE 28
OPERATIONAL BY AUGUST 1, 2028. 29
(III) THE COMMISSION MAY EXTEND A DEADLINE UNDER THI S 30
PARAGRAPH FOR GOOD C AUSE. 31 6 HOUSE BILL 398
(D) THE COMMISSION SHALL REQU IRE EACH PLAN TO DEMONSTRATE THAT 1
THE CONSTRUCTION OR PROCUREMENT OF EACH ENERGY STORAGE DEVIC E: 2
(1) IS BENEFICIAL IN TERMS OF COST, INCLUDING A DEMONSTRATION 3
OF ANY: 4
(I) AVOIDED OR DELAYED T RANSMISSION, DISTRIBUTION, AND 5
GENERATION COSTS ; AND 6
(II) AVOIDED EMISSIONS; AND 7
(2) CAN BE COMPLETED WITHIN 18 MONTHS AFTER THE PLAN IS 8
APPROVED. 9
(E) (1) A DEVELOPER OF A THIRD–PARTY–OWNED ENERGY STORAGE 10
DEVICE CONSTRUCTED IN ACCORDANCE WITH T HIS SECTION SHALL EN SURE THAT 11
WORKERS ARE PAID NOT LESS THAN THE PREVAILING WAGE RATE DETERMINED 12
UNDER TITLE 17, SUBTITLE 2 OF THE STATE FINANCE AND PROCUREMENT 13
ARTICLE. 14
(2) AN ENERGY STORAGE DEVIC E CONSTRUCTED AND OWNE D BY AN 15
ELECTRIC COMPANY SHALL BE CONSTRUCTED BY: 16
(I) EMPLOYEES OF THE ELECTRIC COMPANY ; OR 17
(II) CONTRACTORS THAT SHA LL ENSURE THAT WORKE RS 18
CONSTRUCTING THE ENE RGY STORAGE DEVICE A RE PAID NOT LESS THAN THE 19
PREVAILING WAGE RATE DETERMINED UNDER TITLE 17, SUBTITLE 2 OF THE STATE 20
FINANCE AND PROCUREMENT ARTICLE. 21
(3) AN ELECTRIC COMPANY S HALL PROVIDE ITS EMPLOYEE 22
BARGAINING UNIT AN O PPORTUNITY TO PROVID E MAINTENANCE AND OP ERATIONS 23
FOR ANY ENERGY STORA GE DEVICE OWNED BY T HE ELECTRIC COMPANY . 24
(4) (I) SUBJECT TO SUBPARAGRA PH (II) OF THIS PARAGRAPH , AN 25
ELECTRIC COMPANY MAY CONTRACT ANY WORK UN DER THIS SECTION NOT 26
CONDUCTED BY THE COM PANY’S EMPLOYEE BARGAININ G UNIT TO A QUALIFIE D 27
CONTRACTOR . 28
(II) AN ELECTRIC COMPANY S HALL REQUIRE A CONTR ACTOR 29
OR SUBCONTRACT OR ON A PROJECT UNDER T HIS SECTION TO: 30
HOUSE BILL 398 7
1. PAY THE AREA PREVAIL ING WAGE RATE DETERM INED 1
BY THE COMMISSIONER OF LABOR AND INDUSTRY, INCLUDING WAGES AND FRINGE 2
BENEFITS; AND 3
2. OFFER HEALTH CARE AN D RETIREMENT BENEFIT S TO 4
THE EMPLOYEES WORKIN G ON THE PROJECT . 5
7–229. RESERVED. 6
7–230. RESERVED. 7
PART III. ZERO–EMISSION CREDITS. 8
7–231. 9
(A) IN THIS PART THE FOLL OWING WORDS HAVE THE MEANINGS 10
INDICATED. 11
(B) “BENEFICIAL NUCLEAR FA CILITY” MEANS A NUCLEAR REAC TOR THAT 12
IS LOCATED IN AND PR OVIDES ENVIRONMENTAL BENEFITS TO THE STATE. 13
(C) “ZERO–EMISSION CREDIT ” OR “ZEC” MEANS A PAYMENT EQUAL TO THE 14
GENERATION ATTRIBUTE S OF 1 MEGAWATT –HOUR OF ELECTRICITY THAT IS 15
DERIVED FROM A BENEF ICIAL NUCLEAR FACILI TY. 16
7–232. 17
(A) SUBJECT TO SUBSECTION (B) OF THIS SECTION, A BENEFICIAL NUCLEAR 18
FACILITY MAY SUBMIT AN APPLICATIO N TO THE COMMISSION TO RECEIVE 19
ZERO–EMISSION CREDITS . 20
(B) (1) A BENEFICIAL NUCLEAR F ACILITY MAY NOT RECE IVE 21
ZERO–EMISSION CREDITS DUR ING ANY PERIOD IN WH ICH THE FACILITY RECEIVES 22
ZERO–EMISSION NUCLEAR POW ER PRODUCTION TAX CREDI TS UNDER § 13105 OF 23
THE INFLATION REDUCTION ACT OF 2022. 24
(2) THE COMMISSION MAY NOT OF FER ZERO–EMISSION CREDITS 25
AFTER 2055. 26
(3) TO BE ELIGIBLE TO REC EIVE A ZERO –EMISSION CREDIT , A 27
BENEFICIAL NUCLEAR F ACILITY MUST MAINTAIN A NEUTRAL POSITION IN ANY 28
LABOR ORGANIZING THA T TAKES PLACE AT THE FACIL ITY. 29
8 HOUSE BILL 398
7–233. 1
(A) AFTER NOTICE AND AN OPPORTUNITY FOR A HE ARING, THE 2
COMMISSION SHALL APPR OVE OR DENY AN APPLI CATION SUBMITTED UNDER § 3
7–232 OF THIS SUBTITLE WITHIN 9 MONTHS AFTER THE APPLICATIO N IS FILED. 4
(B) THE COMMISSION MAY APPROVE AN APPLICATI ON: 5
(1) IN WHOLE OR IN PART ; AND 6
(2) SUBJECT TO ANY LIMITATIONS AND QUAL IFICATIONS THAT THE 7
COMMISSION CONSIDERS NECESSARY AND IN THE PUBLIC IN TEREST. 8
7–234. 9
(A) SUBJECT TO SUBSECTION (B) OF THIS SECTION , THE PRICE FOR A 10
ZERO–EMISSION CREDIT SHALL BE EQUAL TO [$15/MWH – 80% X (GROSS 11
RECEIPTS – $25/MWH)]. 12
(B) THE $15/MWH AND $25/MWH CALCULATIONS SHALL BE ADJUSTED FOR 13
INFLATION. 14
7–235. 15
(A) THE COMMISSION SHALL ADOP T REGULATIONS TO IMP LEMENT THIS 16
PART NOT LATER THAN 365 DAYS BEFORE THE EXPIRATION OF TH E AVAILABILITY 17
OF ZERO–EMISSION NUCLEAR POW ER PRODUCTION TAX CR EDITS UNDER § 13105 OF 18
THE INFLATION REDUCTION ACT OF 2022. 19
(B) THE REGULATIONS SHALL : 20
(1) INCLUDE DATA SUBMISSION REQU IREMENTS NECESSARY T O 21
EVALUATE A BENEFICIAL NUCLEAR FACILITY’S PROJECTED ENVIRONMEN TAL 22
BENEFITS AND ANNUAL GROSS RECEIPTS ; AND 23
(2) PROVIDE FOR THE RECA PTURE OF THE ALLOCAT ION OF ANY 24
ZERO–EMISSION CREDIT WITHIN THE PR EVIOUS 3 YEARS TO A BENEFICIAL NUCLEAR 25
FACILITY THAT PERMANENTLY TER MINATES OPERATIONS , EXCEPT IN THE CASE O F 26
FORCE MAJEURE. 27
7–701. 28
(a) In this subtitle the following words have the meanings indicated. 29
HOUSE BILL 398 9
(m) “Renewable energy credit” or “credit” means a credit equal to the generation 1
attributes of 1 megawatt–hour of electricity that is derived from a Tier 1 renewable source 2
or a Tier 2 renewable source that is located: 3
(1) in the PJM region; 4
(2) outside the area described in item (1) of this subsection but in a control 5
area that is adjacent to the PJM region, if the electricity is delivered into the PJM region; 6
or 7
(3) on the outer continental shelf of the Atlantic Ocean in an area that: 8
(i) the United States Department of the Interior designates for 9
leasing after coordination and consultation with the State in accordance with § 388(a) of 10
the Energy Policy Act of 2005; and 11
(ii) is between 10 and 80 miles off the coast of the State. 12
(M–1) “RENEWABLE ENERGY CRED IT–II” OR “REC–II” MEANS A 13
RENEWABLE ENERGY C REDIT THAT IS DERIVE D FROM AN ENERGY GENERATING 14
SYSTEM PROCURED IN ACCORDANCE WITH SUBTITLE 12 OF THIS TITLE. 15
7–704.3. 16
(a) (1) The General Assembly finds and declares that it is: 17
(I) in the public interest to upgrade and expand the transmission 18
system to accommodate the buildout of at least 8,500 megawatts of offshore wind energy 19
from qualified offshore wind projects serving the State by 2031; AND 20
(II) THE PUBLIC POLICY OF THE STATE TO ENGAGE IN 21
COORDINATED TRANSMIS SION PLANNING TO SUP PORT OFFSHORE WIND ENERGY ON 22
A MULTISTATE, REGIONAL, OR INTER–REGIONAL BASIS . 23
(2) TO FURTHER THE PUBLIC POLICY STATED IN PARAGRAPH (1)(II) 24
OF THIS SUBSECTION , THE COMMISSION SHALL PURSUE ONE OF THE FOLLOWING 25
COORDINATED APPROACH ES TO THE TRANSMISSION OF ENER GY DERIVED FROM 26
OFFSHORE WIND : 27
(I) PJM INTERCONNECTION ’S LONG–TERM TRANSMISSION 28
PLANNING PROCESS ; OR 29
(II) AN ALTERNATIVE VOLUN TARY AGREEMENT . 30
10 HOUSE BILL 398
(b) (1) To meet the goals established under § 7–703 of this subtitle and 1
subsection (a) of this section, the Commission, in consultation with the Maryland Energy 2
Administration, shall request that PJM Interconnection conduct an analysis of 3
transmission system upgrade and expansion options that take into consideration both 4
onshore and offshore infrastructure. 5
(2) The Commission: 6
(i) shall consult with other states served by PJM Interconnection to 7
evaluate regional transmission cooperation that could help achieve the State’s renewable 8
energy and offshore wind energy goals with greater efficiency; 9
(ii) shall work with PJM Interconnection to ensure that the analysis 10
requested under paragraph (1) of this subsection includes an analysis of solutions that: 11
1. use an open–access collector transmission system to allow 12
for the interconnection of multiple qualified offshore wind projects at a single [substation] 13
OR AT MULTIPLE SUBSTATIONS LOCATED IN OR NEAR THE DELMARVA PENINSULA; 14
2. TO THE EXTENT POSSIBLE, USE UPGRADES TO 15
EXISTING TRANSMISSIO N SYSTEMS BEFORE CON SIDERING NEW TRANSMISSION 16
SYSTEM ELEMENTS, INCLUDING USING UPGRADES TO THE EXIS TING 138 KILOVOLTS 17
AND 230 KILOVOLTS TRANSMISSION ELEMENT S IN THE DELMARVA PENINSULA TO 18
HIGHER VOLTAGE LEVEL S; 19
3. SUPPORT 8,500 MEGAWATTS OF OFFSHORE WIND 20
ENERGY GENERATION TO SERVE THE STATE’S LOAD EITHER THROUG H INTRASTATE 21
TRANSMISSION UPGRADE S OR INTERSTATE TRAN SMISSION UPGRADES BE TWEEN 22
THE STATE AND DELAWARE; 23
[2.] 4. avoid a significant outage, or single contingency, of any 24
part of the transmission system; 25
[3.] 5. reduce permitting risks, impacts on communities, and 26
unnecessary high costs; 27
[4. leverage existing infrastructure; 28
5.] 6. offer benefits that address additional grid challenges; and 29
[6.] 7. address any other issues that the Commission identifies; 30
[and] 31
(iii) SHALL ENSURE THE COMPLETIO N OF A COST–BENEFIT 32
ANALYSIS OF VARIOUS APPROACHE S FOR UPGRADING AND EXPAND ING THE 33 HOUSE BILL 398 11
TRANSMISSION SYSTEM TO MEET THE STATE’S OFFSHORE WIND ENERGY TARGETS 1
AND ENERGY NEEDS , INCLUDING: 2
1. AN ANALYSIS OF THE FOLLOWING THREE SCENARIOS: 3
A. INTERCONNECTING OFFS HORE WIND FACILITIES TO 4
THE PJM INTERCONNECTION SYSTEM ON A RADIAL B ASIS, BASED ON STUDY 5
ESTIMATES OF PAST RADIAL INTER CONNECTION COSTS AND FUTURE PROJECTED 6
RADIAL INTERCONNECTI ON COSTS; 7
B. A COORDINATED TRANSMIS SION SOLUTION THAT 8
CONNECTS ENERGY DERIVED FROM OFFSHORE WIN D DIRECTLY TO MAJOR LO AD 9
CENTERS IN THE STATE; AND 10
C. A COORDINATED TRANSM ISSION SOLUTION THAT 11
DOES NOT CONNECT ENERGY DERIV ED FROM OFFSHORE WIN D DIRECTLY TO MAJOR 12
LOAD CENTERS IN THE STATE; AND 13
2. AN ECONOMIC ANALYSIS THAT CONSIDERS, OVER THE 14
EXPECTED LIFE OF EAC H FACILITY: 15
A. THE COSTS OF ANY TRA NSMISSION CONSTRUCTION 16
OR UPGRADES THAT ARE AVOIDED BY ANY NEW OFFSHORE WIN D ENERGY 17
GENERATION AND TRANSMISSION DEV ELOPMENT; 18
B. ANY PRODUCTION COST SAVINGS THAT RESULT FROM 19
MEETING THE STATE’S OFFSHORE WIND ENERGY TARGETS; 20
C. ANY REDUCTION IN TRA NSMISSION LOSSES ; 21
D. CHANGES IN TOTAL PJM INTERCONNECTION 22
MARKET COSTS ; 23
E. ENVIRONMENTAL BENEFI TS; 24
F. RELIABILITY BENEFITS ; AND 25
G. ANY OTHER BENEFITS O R COSTS IDENTIFIED BY THE 26
COMMISSION; AND 27
(IV) may consult with owners of transmission facilities in the State to 28
gather relevant technical information. 29
12 HOUSE BILL 398
(3) The Commission may enter into any necessary agreements with PJM 1
Interconnection for transmission planning to: 2
(i) initiate PJM Interconnection’s analysis; or 3
(ii) assist with the solicitation of proposals for offshore wind 4
transmission projects. 5
(4) On or before July 1, 2024, the Commission shall submit a status update 6
on the analysis requested under paragraph (1) of this subsection to the General Assembly, 7
in accordance with § 2–1257 of the State Government Article. 8
(c) (1) On or before July 1, 2025, the Commission shall issue, or request that 9
PJM Interconnection issue, one or more competitive solicitations for proposals for open 10
access offshore wind transmission facilities and complementary onshore transmission 11
upgrades and expansions. 12
(2) The Commission may issue, or request that PJM Interconnection issue, 13
further solicitations for proposals after this date if determined necessary by the 14
Commission. 15
(e) (2) The Commission may evaluate, or request that PJM Interconnection 16
assist with the evaluation of, proposals that include: 17
(i) upgrading the existing transmission grid AND DEPLOYING 18
ADVANCED TRANSMISSIO N TECHNOLOGIES ; 19
(ii) extending the existing transmission grid onshore and offshore to 20
be closer to offshore wind energy locations; 21
(iii) interconnecting between offshore substations; 22
(iv) adding energy storage; and 23
(v) the use of HVDC converter technology to support potential 24
weaknesses in the transmission grid. 25
7–704.4. 26
(d) (1) The State shall: 27
(i) issue a draft solicitation for procurement of offshore wind energy 28
for public comment and review on or before June 1, 2024; 29
(ii) issue a procurement for offshore wind energy on or before July 30
31, 2024; 31
HOUSE BILL 398 13
(iii) provide a procurement submission process window of not less 1
than 180 days; and 2
(iv) award contracts in a timely manner. 3
(2) (i) Subject to subparagraph (ii) of this paragraph, on or before 4
September 1, 2025, the State may enter into a contract or contracts for the procurement 5
issued under paragraph (1) of this subsection. 6
(ii) The State may modify the date established in subparagraph (i) 7
of this paragraph if an unforeseen circumstance adversely affects the procurement 8
submission process. 9
(e) (1) In addition to the solicitation and procurement issued under subsection 10
(d) of this section, the State[: 11
(i) shall issue a draft solicitation for procurement of offshore wind 12
energy for public comment and review on or before September 1, 2025; and 13
(ii)] shall issue a procurement for offshore wind energy on or before 14
December 31, 2025. 15
(2) Subject to paragraph (3) of this subsection and in addition to any 16
contract entered into under subsection (d) of this section, on or before March 31, 2027, the 17
State may enter into a contract or contracts for the procurement issued under paragraph 18
(1) of this subsection. 19
(3) The State may modify the date established in paragraph (2) of this 20
subsection if an unforeseen circumstance adversely affects the procurement submission 21
process. 22
7–705. 23
(b) (1) This subsection does not apply to a shortfall from the required Tier 1 24
renewable sources that is to be derived from post–2022 geothermal systems. 25
(2) [If] BEGINNING OCTOBER 1, 2025, IF an electricity supplier fails to 26
comply with the renewable energy portfolio standard for the applicable year, the electricity 27
supplier shall pay into the [Maryland Strategic Energy Investment Fund established under 28
§ 9–20B–05 of the State Government Article] ESCROW ACCOUNT ESTAB LISHED UNDER 29
PARAGRAPH (4) OF THIS SUBSECTION : 30
(i) except as provided in item (ii) of this paragraph, a compliance fee 31
of: 32
14 HOUSE BILL 398
1. the following amounts for each kilowatt–hour of shortfall 1
from required Tier 1 renewable sources other than the shortfall from the required Tier 1 2
renewable sources that is to be derived from solar energy: 3
A. 4 cents through 2016; 4
B. 3.75 cents in 2017 and 2018; 5
C. 3 cents in 2019 through 2023; 6
D. 2.75 cents in 2024; 7
E. 2.5 cents in 2025; 8
F. 2.475 cents in 2026; 9
G. 2.45 cents in 2027; 10
H. 2.25 cents in 2028 and 2029; and 11
I. 2.235 cents in 2030 and later; 12
2. the following amounts for each kilowatt–hour of shortfall 13
from required Tier 1 renewable sources that is to be derived from solar energy: 14
A. 45 cents in 2008; 15
B. 40 cents in 2009 through 2014; 16
C. 35 cents in 2015 and 2016; 17
D. 19.5 cents in 2017; 18
E. 17.5 cents in 2018; 19
F. 10 cents in 2019; 20
G. 10 cents in 2020; 21
H. 8 cents in 2021; 22
I. 6 cents in 2022; 23
J. 6 cents in 2023; 24
K. 6 cents in 2024; 25
HOUSE BILL 398 15
L. 5.5 cents in 2025; 1
M. 4.5 cents in 2026; 2
N. 3.5 cents in 2027; 3
O. 3.25 cents in 2028; 4
P. 2.5 cents in 2029; and 5
Q. 2.25 cents in 2030 and later; and 6
3. 1.5 cents for each kilowatt–hour of shortfall from required 7
Tier 2 renewable sources; or 8
(ii) for industrial process load: 9
1. for each kilowatt–hour of shortfall from required Tier 1 10
renewable sources, a compliance fee of: 11
A. 0.8 cents in 2006, 2007, and 2008; 12
B. 0.5 cents in 2009 and 2010; 13
C. 0.4 cents in 2011 and 2012; 14
D. 0.3 cents in 2013 and 2014; 15
E. 0.25 cents in 2015 and 2016; and 16
F. except as provided in paragraph (3) of this subsection, 0.2 17
cents in 2017 and later; and 18
2. nothing for any shortfall from required Tier 2 renewable 19
sources. 20
(3) For industrial process load, the compliance fee for each kilowatt–hour 21
of shortfall from required Tier 1 renewable sources is nothing for the year following any 22
year during which, after final calculations, the net rate impact per megawatt–hour from 23
Round 1 offshore wind projects exceeded $1.65 in 2012 dollars. 24
(4) (I) SUBJECT TO ANY ESCROW ACCOUNT RESERVE 25
REQUIREMENT THE COMMISSION ESTABLISHES, THE COMPLIANCE FEES PAID INTO 26
THE ESCROW ACCOUNT E STABLISHED IN ACCORD ANCE WITH THIS SUBSE CTION 27
SHALL BE DISTRIBUTED TO ELECTRIC COMPANIE S TO BE REFUNDED OR CREDITED 28
TO EACH DISTRIBUTION CUSTOMER BASED ON TH E CUSTOMER’S CONSUMPTION OF 29 16 HOUSE BILL 398
ELECTRICITY SUPPLY THAT IS SUBJECT TO THE RENEWABLE ENERGY PORTFOLIO 1
STANDARD. 2
(II) THE PROCESS UNDER SUBPARAGRAPH (I) OF THIS 3
PARAGRAPH RELATED TO THE REFUN DING OR CREDITING OF AMOUNTS TO 4
DISTRIBUTION CUSTOME RS SHALL BE DIRECTED AN D OVERSEEN BY THE 5
COMMISSION. 6
(5) THE COMMISSION SHALL ADOP T REGULATIONS TO IMP LEMENT 7
THIS SUBSECTION , INCLUDING: 8
(I) THE ESTABLISHMENT OF AN ESCROW ACCOUNT TO BE 9
UNDER, SUBJECT TO PARAGRAPH (4)(II) OF THIS SUBSECTION , THE SUPERVISION OF 10
THE MARYLAND ENERGY ADMINISTRATION ; AND 11
(II) DEFINING RULES TO FA CILITATE AND ENSURE THE SECURE 12
AND TRANSPARENT TRAN SFER OF COMPLIANCE FEE PAYMENTS TO ELECTRIC 13
COMPANIES TO BE DIST RIBUTED BACK TO DIST RIBUTION CUSTOMERS . 14
7–709. 15
(a) An electricity supplier may use accumulated renewable energy credits to meet 16
the renewable energy portfolio standard, including credits created by a renewable on–site 17
generator. 18
(b) (1) (I) IN THIS SUBSECTION TH E FOLLOWING WORDS HA VE THE 19
MEANINGS INDICATED. 20
(II) “CERTIFIED SREC” HAS THE MEANING STAT ED IN § 21
7–709.1 OF THIS SUBTITLE . 22
(III) “SREC–II” HAS THE MEANING STAT ED IN § 7–709.2 OF THIS 23
SUBTITLE. 24
(2) A renewable energy credit may be sold or otherwise transferred. 25
(3) AN ELECTRICITY SUPPLIER THAT PROCURE S RENEWABLE 26
ENERGY CREDITS TO MEET THE RENEWABL E ENERGY PORTFOLIO S TANDARD SHALL 27
PROCURE CREDITS TO M EET THE STANDARD IN THE FOLLOWING ORDER : 28
(I) FIRST, ORECS, REC–IIS, AND SREC–IIS; 29
(II) SECOND, CERTIFIED SRECS; AND 30
HOUSE BILL 398 17
(III) THIRD, RENEWABLE ENERGY CREDITS OTHER THAN 1
ORECS, REC–IIS, SREC–IIS, AND CERTIFIED SRECS. 2
7–709.1. 3
(a) (1) In this section the following words have the meanings indicated. 4
(2) “Brownfield” has the meaning stated in § 7–207 of this title. 5
(3) “Certified SREC” means a solar renewable energy credit generated by 6
a certified system. 7
(4) “Certified system” means a solar energy generating system certified by 8
the Commission under the Program to generate certified SRECs with the compliance value 9
specified in subsection (c) of this section. 10
(5) “Program” means the Small Solar Energy Generating System Incentive 11
Program. 12
7–709.2. 13
(A) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE MEANINGS 14
INDICATED. 15
(2) “PROGRAM” MEANS THE UTILITY–SCALE SREC–II PROGRAM. 16
(3) “QUALIFYING SMALL SYST EM” HAS THE MEANING STAT ED IN 17
§ 7–709.3 OF THIS SUBTITLE. 18
(4) “QUALIFYING SYSTEM ” MEANS A UTILITY –SCALE SOLAR ENERGY 19
GENERATING SYSTEM CE RTIFIED TO GENERATE SREC–IIS. 20
(5) “SREC–II” MEANS A SOLAR RENEWABLE ENER GY CREDIT EQUAL 21
TO THE GENERATION AT TRIBUTES OF 1 MEGAWATT –HOUR OF ELECTRICITY THAT IS 22
DERIVED FROM A QUALI FYING SYSTEM OR A QU ALIFYING SMALL SYSTE M. 23
(6) “UTILITY–SCALE SOLAR ENERGY GENERATI NG SYSTEM” MEANS A 24
SOLAR PHOTOVOLTAIC S YSTEM THAT HAS A GENERATIN G CAPACITY THAT EXCE EDS 25
5 MEGAWATTS , AS MEASURED BY THE A LTERNATING CURRENT R ATING OF THE 26
SYSTEM’S INVERTER. 27
(B) THERE IS A UTILITY–SCALE SREC–II PROGRAM IN THE COMMISSION. 28
18 HOUSE BILL 398
(C) THE PROGRAM SHALL PROVIDE INCENTIVES FOR THE D EVELOPMENT 1
OF AT LEAST 3,000 MEGAWATTS OF NEW UTILITY –SCALE SOLAR GENERATI ON BY 2
2035. 3
(D) (1) UNDER THE PROGRAM, A QUALIFYING SYSTEM SHALL GENERATE 4
SREC–IIS. 5
(2) A QUALIFYING SYSTEM THAT GENERATES SREC–IIS UNDER THE 6
PROGRAM MAY NOT SIMULTANEOUS LY RECEIVE REC–IIS, RECS, OR ANY OTHER 7
EQUIVALENT CERTIFICATES. 8
(3) EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION , THE 9
PROVISIONS OF THIS S UBTITLE RELATING TO RENEWABLE ENERGY CRE DITS SHALL 10
APPLY TO SREC–IIS GENERATED UNDER THE PROGRAM. 11
(4) AN SREC–II GENERATED UNDER THE PROGRAM MAY BE 12
APPLIED ONLY TOWARD MEETING THE R ENEWABLE ENERGY PORT FOLIO STANDARD 13
BEGINNING WITH THE Y EAR IN WHICH THE SREC–II IS GENERATED. 14
(E) THE COMMISSION SHALL ADOP T REGULATIONS TO IMPLEMENT THIS 15
SECTION, INCLUDING REGULATION S TO ESTABLISH REQUI REMENTS FOR 16
CERTIFICATION AS A Q UALIFYING SYSTEM UND ER THE PROGRAM. 17
7–709.3. 18
(A) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE MEANINGS 19
INDICATED. 20
(2) “ADMINISTRATIVELY DETE RMINED INCENTIVE” MEANS THE 21
MONETARY VALUE OF AN SREC–II GENERATED BY A QUALIFYING SMALL SYSTEM 22
UNDER THE PROGRAM. 23
(3) “CAPACITY BLOCK ” MEANS THE MAXIMUM AMOUNT OF 24
GENERATING CAPACITY , MEASURED IN MEGAWATTS , THAT THE COMMISSION 25
DETERMINES CAN BE ALLOTTED TO A SPECIFIC MARKET SEGM ENT FOR A GIVEN 26
INCENTIVE YEAR . 27
(4) “COMMUNITY SOLAR ENERG Y GENERATING SYSTEM ” HAS THE 28
MEANING STATED IN § 7–306.2 OF THIS TITLE. 29
(5) “ELIGIBLE CUSTOMER –GENERATOR ” HAS THE MEANING STAT ED 30
IN § 7–306 OF THIS TITLE. 31
HOUSE BILL 398 19
(6) “MARKET SEGMENT ” MEANS THE GROUP CLASSIFICA TION FOR 1
THE TYPE OF SMALL SOLAR ENERGY GENERAT ING SYSTEM S ELIGIBLE FOR 2
CERTIFICATION UNDER THE PROGRAM. 3
(7) “NET METERED SOLAR ENERGY GENERATING SYSTEM” MEANS A 4
SMALL SOLAR ENERGY GENERATING SYSTEM US ED BY AN ELIGIBLE 5
CUSTOMER–GENERATOR FOR NET ME TERING IN ACCORDANCE WITH § 7–306 OF 6
THIS TITLE. 7
(8) “PROGRAM” MEANS THE SMALL SOLAR FACILITIES INCENTIVE 8
PROGRAM. 9
(9) “PROJECT OFF–TAKER” MEANS THE END USER O F SREC–IIS 10
THAT ARE GENERATED BY A QUALI FYING SMALL SYSTEM. 11
(10) “QUALIFYING SMALL SYST EM” MEANS A SMALL SOLAR ENERGY 12
GENERATING SYSTEM CERTIFIED TO GENERAT E SREC–IIS UNDER THE PROGRAM. 13
(11) “SMALL SOLAR ENERGY GENERATI NG SYSTEM ” MEANS A 14
PHOTOVOLTAIC SYSTEM THAT HAS A GENERATING CAPACITY OF 5 MEGAWATTS OR 15
LESS, AS MEASURED BY THE A LTERNATING CURRENT R ATING OF THE SYSTEM ’S 16
INVERTER. 17
(12) “SREC–II” HAS THE MEANING STAT ED IN § 7–709.2 OF THIS 18
SUBTITLE. 19
(B) (1) THERE IS A SMALL SOLAR FACILITIES INCENTIVE PROGRAM. 20
(2) THE COMMISSION SHALL ADMI NISTER THE PROGRAM. 21
(C) THE PROGRAM SHALL PROVIDE INCENTIVES FOR THE D EVELOPMENT 22
OF, BY 2035, AT LEAST 3,000 MEGAWATTS OF NEW SOL AR ENERGY GENERATION BY 23
OWNERS OF SMALL SOLAR ENERGY GENERATING SYSTEMS T HAT ARE: 24
(1) COMMUNI TY SOLAR ENERGY GENE RATING SYSTEMS ; OR 25
(2) NET METERED SOLAR EN ERGY GENERATING SYST EMS. 26
(D) (1) THE COMMISSION SHALL ESTA BLISH ELIGIBILITY CR ITERIA AND 27
AN APPLICATION PROCE SS BY WHICH AN OWNER OF A SMALL SOLAR ENERGY 28
GENERATING SYSTEM MAY APPLY TO BECOME A QUALIFYING SMALL SYSTEM AND 29
GENERATE SREC–IIS UNDER THE PROGRAM. 30
20 HOUSE BILL 398
(2) IN ADDITION TO ANY REQUIREMENTS ESTABLISHED BY THE 1
COMMISSION UNDER PARA GRAPH (1) OF THIS SUBSECTION , TO BE ELIGIBLE UNDER 2
THE PROGRAM, A SMALL SOLAR ENERGY GENERATING SYSTEM SHALL : 3
(I) BE LOCATED IN THE STATE; 4
(II) BE ELIGIBLE FOR INCL USION IN MEETING THE RENEWABLE 5
ENERGY PORTFOLIO STA NDARD; 6
(III) HAVE A GENERATING CA PACITY OF 5 MEGAWATTS OR LESS , 7
AS MEASURED BY THE A LTERNATING CURRENT RATING OF THE SYSTEM ’S INVERTER; 8
(IV) BE PLACED IN SERVICE ON OR AFTER JULY 1, 2027; AND 9
(V) BE BENEFICIAL TO THE ELECTRIC DISTRIBUTION SYSTEM IN 10
THE STATE. 11
(E) ON OR BEFORE JANUARY 1, 2028, THE PROGRAM SHALL BEGIN 12
ACCEPTING APPLICATIO NS FROM QUALIFYING SMALL SYS TEMS TO FULFILL 13
CAPACITY WITHIN A CA PACITY BLOCK ON A FI RST–COME, FIRST–SERVED BASIS. 14
(F) (1) ON OR BEFORE JANUARY 1, 2027, AND EVERY 3 YEARS 15
THEREAFTER , THE COMMISSION SHALL ESTABLISH AN ADMINISTRATIVELY 16
DETERMINED INCENTIVE AND ANNUAL CAPACITY BLOCK FOR EACH OF THE 17
FOLLOWING MARKET SEG MENTS UNDER THE PROGRAM: 18
(I) BEHIND–THE–METER RESIDENTIAL ; 19
(II) BEHIND–THE–METER NONRESIDENTIAL ; 20
(III) AGGREGATED NET METER ING; AND 21
(IV) COMMUNITY SOLAR . 22
(2) AT ANY TIME A FTER PROVIDING PUBLIC NOTICE THE 23
COMMISSION MAY ADJUST THE ADMIN ISTRATIVELY DETERMIN ED INCENTIVE AND 24
ANNUAL CAPACITY BLOCKS IF THE COMMISSION DETERMINES AN ADJUSTMENT IS 25
NECESSARY. 26
(3) THE ADMINISTRATIVELY DETERMINED INCENTIVE FOR A 27
QUALIFIED SMALL SYST EM SHALL BE FIXED FO R 15 YEARS AT THE AMOUNT OF THE 28
ADMINISTRATIVELY DET ERMINED INCENTIVE TH AT WAS ESTABLISHED I N THE YEAR 29 HOUSE BILL 398 21
IN WHICH THE QUALIFY ING SMALL SYSTEM WAS CONSTRUCTED OR RECEI VED 1
CERTIFICATION AS A Q UALIFYING SMALL SYST EM, WHICHEVER IS LATER . 2
(4) (I) IN ESTABLISHING AN ADMINISTRATIVELY DET ERMINED 3
INCENTIVE AND ANNUAL CAPACITY BLOCKS UNDER PARAGRAPH (1) OF THIS 4
SUBSECTION, THE COMMISSION SHALL BALA NCE THE NEED FOR CON TINUED 5
MARKET DEVELOPMENT F OR EACH MARKET SEGME NT WHILE LIMITING THE 6
PROJECTED NET RATE IMPACT FOR ALL CUSTOMERS TO 5% OF THE TOTAL 7
ELECTRICITY BILL OVE R THE DURATION OF TH E PROGRAM. 8
(II) THE NET RATE IMPACT C ALCULATIONS SHALL TA KE INTO 9
ACCOUNT ANY COSTS AN D BENEFITS ATTRIBUTA BLE TO THE PROGRAM AS 10
DETERMINED BY THE COMMISSION, INCLUDING: 11
1. ENERGY GENERATED ; 12
2. THE CAPACITY OF QUALIFYING SMALL SYS TEMS IN 13
THE PROGRAM; AND 14
3. THE TRANSMISSION AND DISTRIBUTION OF THE 15
ENERGY THROUGH THE TRANSMISSION AND DIS TRIBUTION SYSTEMS. 16
(G) IN DETERMINING THE AD MINISTRATIVELY DETERMINED INCENTIVE 17
FOR EACH MARKET SEGM ENT UNDER SUBSECTION (F)(1) OF THIS SECTION , THE 18
COMMISSION SHALL : 19
(1) FOR EACH MARKET SEGM ENT, CONSIDER PRICE DIFFE RENTIALS 20
BASED ON THE FOLLOWI NG CRITERIA: 21
(I) PROJECT SIZE; 22
(II) PROJECT OFF–TAKER TYPE; 23
(III) PROJECT LOCATION ; AND 24
(IV) ELECTRIC COMPANY SER VICE TERRITORY ; 25
(2) ESTABLISH MONETARY V ALUES THAT ENCOURAGE MARKET 26
DEVELOPMENT WHILE BA LANCING RATEPAYER IN TERESTS; AND 27
(3) STRIVE TO ACHIEVE MA RKET DIVERSITY , INCLUDING 28
GEOGRAPHIC DIVERS ITY AND PROJECT OFF –TAKER DIVERSITY . 29
22 HOUSE BILL 398
(H) IN ESTABLISHING THE CAPACITY BLOCK FOR EACH MARKET SEGM ENT 1
UNDER SUBSECTION (F)(1) OF THIS SECTION, THE COMMISSION SHALL : 2
(1) ENABLE MEANINGFUL AN D CONTINUED MARKET G ROWTH FOR 3
EACH MARKET SEGMENT ; 4
(2) CONSIDER THE VALUE OF REDU CING ELECTRICITY DEMAND AND 5
THE COST OF INSTALLING GENERATIN G CAPACITY ON THE TRANSMISSION AND 6
DISTRIBUTION SYSTEMS; AND 7
(3) FOR THE BEHIND –THE–METER RESIDENTIAL MA RKET SEGMENT , 8
ENSURE THAT THE NEXT CAPACITY BLOCK IS ESTABLISHED AS SOON AS 9
REASONABLY POSSIBLE AFTER THE CURRENT CAPACITY BLOCK HAS BEEN FULLY 10
RESERVED. 11
(I) (1) A QUALIFYING SMALL SYS TEM THAT GENERATES SREC–IIS 12
UNDER THIS PROGRAM MAY NOT SIMUL TANEOUSLY RECEIVE REC–IIS, RECS, OR 13
ANY OTHER EQUIVALENT CREDITS. 14
(2) EXCEPT AS OTHERWISE P ROVIDED IN SECTION , THE PROVISIONS 15
OF THIS SUBTITLE REL ATING TO RENEWABLE E NERGY CREDITS SHALL APPLY TO 16
SREC–IIS GENERATED UNDER TH E PROGRAM. 17
(3) AN SREC–II GENERATED UNDER THE PROGRAM MAY BE 18
APPLIED ONLY TOWARD MEETING THE R ENEWABL E ENERGY PORTFOLIO S TANDARD 19
BEGINNING WITH THE Y EAR IN WHICH THE SREC–II IS GENERATED. 20
SUBTITLE 12. ENERGY PROCUREMENT . 21
PART I. DEFINITIONS; GENERAL PROVISIONS. 22
7–1201. 23
(A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS 24
INDICATED. 25
(B) “EFFECTIVE NAMEPLATE C APACITY” MEANS THE AMOUNT OF ENERGY 26
AN ENERGY STORAGE DE VICE CAN DELIVER CON TINUOUSLY TO THE ELE CTRIC 27
DISTRIBUTION SYSTEM OVER A 4–HOUR PERIOD . 28
(C) “ENERGY STORAGE DEVICE ” HAS THE MEANING STAT ED IN § 7–216 OF 29
THIS TITLE. 30
HOUSE BILL 398 23
(D) “REC–II” HAS THE MEANING STAT ED IN § 7–701 OF THIS TITLE. 1
(E) “REC–II PAYMENT” MEANS THE MONETARY V ALUE OF A REC–II 2
GENERATED AND SOLD B Y AN ENERGY GENERATING SY STEM AWARDED A CONTRACT 3
IN ACCORDANCE WITH T HIS SUBTITLE. 4
7–1202. 5
(A) AN APPLICATION FOR A PROPOSED PROJECT UND ER THIS SUBTITLE IS 6
SUBJECT TO A COMMUNI TY BENEFIT AGREEMENT . 7
(B) A COMMUNITY BENEFIT AG REEMENT SHALL : 8
(1) PROMOTE INCREASED OP PORTUNITIES FOR LOCA L BUSINESSES 9
AND SMALL, MINORITY, WOMEN–OWNED, AND VETERAN –OWNED BUSINESSES IN THE 10
CLEAN ENERGY INDUSTR Y; 11
(2) ENSURE THE TIMELY , SAFE, AND EFFICIENT COMPLE TION OF THE 12
PROJECT BY: 13
(I) FACILITATING A STEAD Y SUPPLY OF HIGHLY S KILLED 14
CRAFT WORKERS WHO SH ALL BE PAID NOT LESS THAN THE PREVAILING WAGE RATE 15
DETERMINED BY THE COMMISSIONER OF LABOR AND INDUSTRY UNDER TITLE 17, 16
SUBTITLE 2 OF THE STATE FINANCE AND PROCUREMENT ARTICLE; AND 17
(II) GUARANTEEING THAT TH E CONSTRUCTION WORK 18
PERFORMED IN CONNECT ION WITH THE PROJECT WILL BE SUBJECT TO A N 19
AGREEMENT THAT : 20
1. ESTABLISHES THE TERMS AND CONDITIONS OF 21
EMPLOYMENT AT THE CO NSTRUCTION SITE OF T HE PROJECT OR A PORT ION OF THE 22
PROJECT; 23
2. GUARANTEES AGAINST S TRIKES, LOCKOUTS, AND 24
SIMILAR DISRUPTIONS ; 25
3. ENSURES THAT ALL WOR K ON THE PROJECT FUL LY 26
CONFORMS TO ALL RELEVANT STATE AND FEDERAL LAW S, RULES, AND 27
REGULATIONS , INCLUDING ALL REQUIR ED TRAINING FOR EMPL OYEES; 28
4. CREATES MUTUALLY BIN DING PROCEDURES FOR 29
RESOLVING LABOR DISP UTES ARISING DURING THE TERM OF THE PROJ ECT; 30
24 HOUSE BILL 398
5. SETS FORTH OTHER MEC HANISMS FO R 1
LABOR–MANAGEMENT COOPERATI ON ON MATTERS OF MUT UAL INTEREST AND 2
CONCERN, INCLUDING PRODUCTIVI TY, QUALITY OF WORK , SAFETY, AND HEALTH ; 3
AND 4
6. BINDS ALL CONTRACTOR S AND SUBCONTRACTORS TO 5
THE TERMS OF THE AGR EEMENT THROUGH THE I NCLUSION OF APPROPRI ATE 6
PROVISIONS IN ALL RE LEVANT SOLICITATION AND CONTRACT DOCUMEN TS; 7
(3) PROMOTE SAFE COMPLET ION OF THE PROJECT B Y ENSURING 8
THAT AT LEAST 80% OF THE CRAFT WORKERS ON THE PROJECT HAVE COMPLETED 9
AN OCCUPATIONAL SAFETY AND HEALTH ADMINISTRATION 10–HOUR COURSE ; 10
(4) PROMOTE CAREER TRAIN ING OPPORTUNITIES IN THE 11
MANUFACTURING , MAINTENANCE , AND CONSTRUCTION IND USTRIES FOR LOCAL 12
RESIDENTS, VETERANS, WOMEN, MINORITIES, AND FORMERLY INCARCE RATED 13
INDIVIDUALS; 14
(5) INCLUDE PROVISIONS F OR LOCAL HIRING AND THE HIRING O F 15
HISTORICALLY DISADVA NTAGED GROUPS ; 16
(6) USE LOCALLY , SUSTAINABLY, AND DOMESTICALLY 17
MANUFACTURED CONSTRU CTION MATERIALS AND COMPONENTS TO THE EX TENT 18
PRACTICABLE ; 19
(7) REQUIRE THE USE OF S KILLED LOCAL LABOR , PARTICULARLY 20
WITH REGARD TO THE C ONSTRUCTION AND MANUFACTURING CO MPONENTS OF THE 21
PROJECT, USING METHODS INCLUD ING OUTREACH , HIRING, OR REFERRAL 22
METHODS THAT ARE AFF ILIATED WITH REGISTE RED APPRENTICESHIP P ROGRAMS 23
UNDER TITLE 11, SUBTITLE 4 OF THE LABOR AND EMPLOYMENT ARTICLE; AND 24
(8) AUTHORIZE THE MARYLAND DEPARTMENT OF LABOR AND THE 25
COMMISSION TO CONSIDE R, REVIEW, AND ENFORCE A STORAG E DEVELOPER OR 26
ENERGY DEVELOPER ’S COMPLIANCE WITH AN Y COMMUNITY BENEFIT AGREEMENT . 27
7–1203. 28
THE COMMISSION MAY CONTRA CT FOR THE SERVICES OF INDEPENDENT 29
CONSULTANTS AND EXPERTS TO IMPLEMENT AND EXECUT E ANY PART OF THIS 30
SUBTITLE. 31
7–1204. RESERVED. 32
HOUSE BILL 398 25
7–1205. RESERVED. 1
PART II. TRANSMISSION ENERGY STORAGE DEVICES. 2
7–1206. 3
(A) THE GENERAL ASSEMBLY FINDS AND DE CLARES THAT THE STATE HAS 4
A GOAL OF REACHING 1,600 MEGAWATTS OF FRONT –OF–THE–METER TRANSMISSION 5
ENERGY STORAGE DEVIC ES. 6
(B) THE COMMISSION SHALL , BY REGULATION OR ORD ER, ESTABLISH A 7
COMPETITIVE PROCESS FOR THE PROCUREMENT OF PROJECTS FOR THE 8
CONSTRUCTION AND DEP LOYMENT OF FRONT–OF–THE–METER TRANSMISSION 9
ENERGY STORAGE DEVIC ES. 10
(C) (1) (I) ON OR BEFORE JANUARY 1, 2026, THE COMMISSION SHALL 11
ISSUE A PROCUREMENT SOLICITATION FOR APP LICATIONS FOR PROJEC TS FOR THE 12
CONSTRUCTION AND DEP LOYMENT OF FRONT –OF–THE–METER TRANSMISSION 13
ENERGY STORAGE DEVIC ES. 14
(II) THE PROCUREMENT SOLICITATION SHALL B E FOR A 15
MAXIMUM OF 800 MEGAWATTS OF CUMULAT IVE ENERGY STORAGE C APACITY, AS 16
MEASURED IN EFFECTIV E NAMEPLATE CAPACITY . 17
(2) ON OR BEFORE OCTOBER 1, 2026, THE COMMISSION SHALL ISSU E 18
A DECISION ON WHETHER TO APPROV E ONE OR MORE PROPOSALS IN AC CORDANCE 19
WITH § 7–1208(B) OF THIS SUBTITLE. 20
(3) (I) EXCEPT AS PROVIDED IN SUBPARAGRAPH (II) OF THIS 21
PARAGRAPH , THE TRANSMISSION ENE RGY STORAGE DEVICES PROCURED IN 22
ACCORDANCE WITH THIS SUBSECTION SHALL BE OPERATIONAL WITHIN 18 MONTHS 23
AFTER A PROJECT IS S ELECTED BY THE COMMISSION. 24
(II) THE COMMISSION MAY EXTEND THE OPERATING DEADLI NE 25
UNDER SUBPARAGRAPH (I) OF THIS PARAGRAPH FO R GOOD CAUSE SHOWN . 26
(D) (1) ON OR BEFORE JANUARY 1, 2027, THE COMMISSION SHALL ISSU E 27
A SECOND PROCUREMENT SOLICITA TION FOR THE PROCUREMENT OF P ROJECTS 28
FOR THE CONSTRUCTION AND DEPLOYMENT OF FRONT–OF–THE–METER 29
TRANSMISSION ENERGY STORAGE DEVIC ES. 30
26 HOUSE BILL 398
(2) THE PROCUREMENT SOLIC ITATION SHALL BE FOR A MAXIMUM OF 1
800 MEGAWATTS OF CUMULAT IVE ENERGY STORAGE CAPACITY, AS MEASURED IN 2
EFFECTIVE NAMEPLATE CAPACITY. 3
(3) ON OR BEFORE OCTOBER 1, 2027, THE COMMISSION SHALL ISSU E 4
A DECISION ON WHETHER TO APPROVE ONE OR MORE PROPOSAL S IN ACCORDANCE 5
WITH § 7–1208(B) OF THIS SUBTITLE. 6
(4) (I) EXCEPT AS PROVIDED IN SUBPARAGRAPH (II) OF THIS 7
PARAGRAPH , THE TRANSMISSION ENE RGY STORAGE DEVICES PROCURED IN 8
ACCORDANCE WITH THIS SUBSECTION SHALL BE OPERATIONAL WITHIN 18 MONTHS 9
AFTER A PROJECT IS S ELECTED BY THE COMMISSION. 10
(II) THE COMMISSION MAY EXTEND THE OPERATING DEADLINE 11
UNDER SUBPARAGRAPH (I) OF THIS PARAGRAPH FO R GOOD CAUSE SHOWN . 12
7–1207. 13
(A) THE COMMISSION SHALL INCL UDE SPECIFICATIONS IN A 14
PROCUREMENT SOLICITATION ISSUED UNDER § 7–1206 OF THIS SUBTITLE THAT 15
REQUIRE EACH PROPOSAL TO: 16
(1) INCLUDE A PROPOSED P RICING SCHEDULE FOR THE 17
TRANSMISSION ENERGY STORAGE DEVICE PROJECT; 18
(2) INCLUDE A COST –BENEFIT ANALYSIS OF THE PROJECT AND THE 19
PROPOSED PRICING SCH EDULE, INCLUDING AN ANALYSI S OF: 20
(I) THE LOCATIONAL VALUE , DURATION, AND TIME TO 21
DEPLOYMENT OF THE EN ERGY STORAGE DEVICES ; 22
(II) AVOIDED OR DELAYED T RANSMISSION, GENERATION , AND 23
DISTRIBUTION COSTS; 24
(III) AVOIDED EMISSIONS IN THE SHORT TERM AND P ROJECTED 25
AVOIDED EMISSIONS IN THE LONG TERM , MEASURED USING THE S OCIAL COST OF 26
CARBON, AS DETERMINED BY THE U.S. ENVIRONMENTAL PROTECTION AGENCY AS 27
OF JANUARY 1, 2025; 28
(IV) THE VALUE OF THE RAPID DEPLOYMENT OF ENERGY 29
STORAGE DEVICES ; AND 30
(V) ANY OTHER AVOIDED CO STS; 31 HOUSE BILL 398 27
(3) ENSURE THAT THE OWNER OR OPERATOR OF THE PROJECT HAS 1
THE CAPABILITY TO EXPORT ELECTRICIT Y FOR SALE ON THE WH OLESALE MARKET 2
AND BID INTO THE PJM CAPACITY MARKET UNDER AN AGREEMENT W ITH PJM 3
INTERCONNECTION ; 4
(4) ENSURE THAT THE ENER GY STORAGE DEVICES CAN DELIVER 5
THEIR EFFECTIVE NAME PLATE CAPACITY ; 6
(5) INCORPORATE A COMMUN ITY BENEFIT AGREEMEN T; 7
(6) ATTEST IN WRITING TH AT ALL CONTRACTORS A ND 8
SUBCONTRACTORS W ORKING ON THE PROJEC T HAVE BEEN IN COMPL IANCE WITH 9
FEDERAL AND STATE WAGE AND HOUR L AWS FOR THE IMMEDIAT ELY PRECEDING 3 10
YEARS OR THE DURATIO N OF THE CONTRACTOR ’S OR SUBCONTRACTOR ’S BUSINESS 11
OPERATION, WHICHEVER IS LONGER ; AND 12
(7) ENSURE A COMPETITIVE BIDDING PROCESS BY RED ACTING 13
PROPRIETARY INFORMAT ION PROVIDED TO THE COMMISSION. 14
(B) FRONT–OF–THE–METER TRANSMISSION E NERGY STORAGE DEVICE S 15
PAIRED WITH TIER 1 OR TIER 2 RENEWABLE SOURCES , AS DEFINED UNDER § 7–701 16
OF THIS TITLE, MAY BE INCLUDED IN A PROPOSAL IN RESPON SE TO A PROCUREMENT 17
SOLICITATION UNDER § 7–1206 OF THIS SUBTITLE. 18
7–1208. 19
(A) IN SELECTING A PROPOS AL FOR A FRONT–OF–THE–METER 20
TRANSMISSION ENERGY STORAGE DEVIC E PROJECT, THE COMMISSION: 21
(1) SHALL SPECIFY THE PR ICING SCHEDULE , WHICH SHALL BE A 22
MONTHLY FIXED PRICE REPRESEN TING THE VALUE OF TH E FRONT–OF–THE–METER 23
TRANSMISSION ENERGY STORAGE DEVICE BEYOND THE PAYMENT S RECEIVED FROM 24
PJM WHOLESALE MARKETS; 25
(2) SHALL SPECIFY THAT F OR CONTINUED RE CEIPT OF PAYMENT 26
UNDER ITEM (1) OF THIS SUBSECTION , AN APPLICANT SHALL DEMONSTRATE , TO 27
THE SATISFACTION OF THE COMMISSION, THAT THE APPLICANT ’S ENERGY STORAGE 28
DEVICE IS AVAILABLE AND PARTICIPATING IN THE PJM ENERGY AND CAPACITY 29
MARKET AT NOT LESS THAN THE CLASS AVERAGE AVAILABILITY RATE ESTABLISHED 30
BY PJM INTERCONNECTION FOR C OMPARABLE DEVICES ; 31
28 HOUSE BILL 398
(3) SHALL INCORPORATE PENALTIE S FOR NONPERFORMANCE IN THE 1
CONTRACT, INCLUDING WITHHOLDIN G OF PAYMENT , FOR ENERGY STORAGE 2
DEVICES THAT FAIL TO MEET AVAILABILITY METRICS ; 3
(4) MAY TERMINATE ENERGY STORAGE DEVICES FROM THE PROGRAM 4
IF DEVICE PERFORMANCE DOES NOT IMPROVE AFTER APPROP RIATE NOTICE AND 5
OPPORTUNITY TO CURE ; AND 6
(5) MAY CONSIDER OTHER N ONPRICE FACTORS SUCH AS: 7
(I) PROJECT MATURITY DATES; 8
(II) SITE CONTROL; AND 9
(III) ANY OTHER RELEVANT N ONPRICE FACTORS AS 10
DETERMINED BY THE COMMISSION. 11
(B) THE COMMISSION SHALL : 12
(1) AFTER GIVING PUBLIC NOTICE, HOLD ONE OR MORE PUBLIC 13
HEARINGS TO RECEIVE PUBLIC COMMENT AND EVALUATE THE PROPOSA LS; AND 14
(2) SUBJECT TO SUBSECTIO N (C) OF THIS SECTION , ISSUE ONE OR 15
MORE ORDERS TO SELECT A PROPOSAL OR PROPOSALS FOR DEVELO PMENT. 16
(C) IF THE COMMISSION FINDS THAT NONE OF THE PROPOSAL S 17
ADEQUATELY SUPPORT T HE GOALS ESTABLISHED UNDER THIS SUBTITLE THE 18
COMMISSION MAY END TH E SOLICITATION PROCE SS WITHOUT SELECTING A 19
PROPOSAL. 20
7–1209. 21
(A) FOR ANY PROPOSAL SELE CTED UNDER THIS PART , THE COMMISSION 22
MAY ADOPT CONDITIONS FOR THE CONSTRUCTION AND OPERATION OF FACILIT IES 23
INCLUDED IN THE PROPOSAL. 24
(B) AN ORDER SELECTING A PROPOSAL UNDER § 7–1208 OF THIS SUBTITLE 25
BESTOWS THE SAME RIG HTS TO THE SELECTED PROPOSAL THAT A GENE RATING 26
SYSTEM WOULD OTHERWI SE BE GRANTED THROUG H A CERTIFICATE OF PUB LIC 27
CONVENIENCE AND NECE SSITY UNDER § 7–207 OF THIS TITLE IF THE SELECTED 28
PROPOSAL IS REVIEWED UNDER AN ALTERNATIVE PROCESS AS DETERMINE D BY THE 29
COMMISSION. 30
HOUSE BILL 398 29
7–1210. 1
ANY TRANSMISSION ENERGY STORAGE DEVICE BUILT IN ACCORDANCE WITH 2
THIS SUBTITLE SHALL COUNT TOWARD T HE ENERGY STORAGE DE VICE 3
DEPLOYMENT GOALS UNDER § 7–216.2 OF THIS TITLE. 4
7–1211. 5
ON OR BEFORE DECEMBER 31, 2026, THE COMMISSION SHALL REPO RT, IN 6
ACCORDANCE WITH § 2–1257 OF THE STATE GOVERNMENT ARTICLE, TO THE 7
GENERAL ASSEMBLY ON THE EFFEC TIVENESS OF THE PROCUREMENT PROCESS 8
ESTABLISHED UNDER TH IS PART. 9
7–1212. RESERVED. 10
7–1213. RESERVED. 11
PART III. RENEWABLE ENERGY CREDITS. 12
7–1214. 13
(A) IN THIS PART THE FOLL OWING WORDS HAVE THE MEANINGS 14
INDICATED. 15
(B) “BROWNFIELD” HAS THE MEANING STAT ED IN § 7–207 OF THIS TITLE. 16
(C) “QUALIFYING SYSTEM ” HAS THE MEANING STAT ED IN § 7–709.2 OF THIS 17
TITLE. 18
(D) “REC ESCROW ADMINISTRATOR ” MEANS THE ENTITY CHO SEN, IN 19
ACCORDANCE WITH § 7–1219 OF THIS SUBTITLE , TO SUPERVISE THE ESC ROW 20
ACCOUNT CREATED UNDE R THIS SUBTITLE TO E NSURE THE SECURE AND 21
TRANSPARENT TRANSFER OF REVENUES , SREC–IIS, AND REC–IIS AMONG 22
QUALIFYING SYSTEMS , WIND SYSTEMS , SMALL HYDROELECTRIC SYSTEMS, AND 23
ELECTRIC COMPANIES . 24
(E) “RENEWABLE ENERGY CRED IT” HAS THE MEANING STAT ED IN § 7–701 25
OF THIS TITLE. 26
(F) “SMALL HYDROELECTRIC S YSTEM” HAS THE MEANING STAT ED IN § 27
7–701(S)(8) OF THIS TITLE. 28
30 HOUSE BILL 398
(G) “SOLAR ENERGY GENERATI NG SYSTEM” HAS THE MEANING STAT ED IN § 1
7–709.2 OF THIS TITLE. 2
(H) “SREC–II” HAS THE MEANING STAT ED IN § 7–709.2 OF THIS TITLE. 3
(I) “SREC–II PAYMENT” MEANS THE MONETARY V ALUE OF AN SREC–II 4
GENERATED AND SOLD B Y A SOLAR ENERGY GENERAT ING SYSTEM AWARDED A 5
CONTRACT IN ACCORDAN CE WITH THIS SUBTITLE. 6
(J) “WIND SYSTEM” MEANS A LAND –BASED WIND ENERGY GE NERATING 7
SYSTEM. 8
7–1215. 9
(A) THROUGH REGULATION OR ORDER , THE COMMISSION SHALL 10
ESTABLISH A COMPETITIVE PROCESS FOR THE PROCUREMENT OF: 11
(1) SREC–IIS FROM QUALIFYING SY STEMS; AND 12
(2) REC–IIS FROM SMALL HYDROEL ECTRIC SYSTEMS AND W IND 13
SYSTEMS. 14
(B) THE COMPETITIVE PROCESS E STABLISHED UNDER THIS PART SHALL 15
REQUIRE THAT : 16
(1) BIDS FROM QUALIFYING SYSTEMS, SMALL HYDROELECTRIC 17
SYSTEMS, AND WIND SYSTEMS SHALL BE ONLY FOR TH E PROCUREMENT OF 18
SREC–IIS AND REC–IIS; AND 19
(2) BIDS SUBMITTED FOR THE PROCUREMENT OF SREC–IIS OR 20
REC–IIS SHALL INCLUDE A N SREC–II OR REC–II PRICING SCHEDULE THA T 21
SPECIFIES A PRICE FOR THE GENERATION ATTRIBUTE S OF THE ORIGINATING 22
ENERGY GENERATING SY STEM, INCLUDING ENERGY , CAPACITY, ANCILLARY 23
SERVICES, AND ENVIRONMENTAL AT TRIBUTES. 24
7–1216. 25
AN ORDER THE COMMISSION ISSUES APP ROVING A PROPOSED 26
PROCUREMENT UNDER THIS PART SHAL L: 27
(1) SPECIFY THE SREC–II OR REC–II PRICING SCHEDULE ; 28
HOUSE BILL 398 31
(2) SPECIFY THE DURATION OF THE SREC–II OR REC–II PRICING 1
SCHEDULE, NOT TO EXCEED 30 YEARS; 2
(3) SPECIFY THE NUMBER O F SREC–IIS OR REC–IIS THAT MAY BE 3
PURCHASED EACH YEAR FROM THE QUALIFYING SYSTE M, SMALL HYDROELECTRIC 4
SYSTEM, OR WIND SYSTEM ; 5
(4) PROVIDE THAT : 6
(I) A PAYMENT MAY NOT BE MADE FOR AN SREC–II OR 7
REC–II UNTIL ELECTRICITY SU PPLY IS GENERATED UNDER THE PROCUREMEN T; 8
AND 9
(II) RATEPAYERS , PURCHASERS OF SREC–IIS AND REC–IIS, 10
AND THE STATE SHALL BE HELD H ARMLESS FOR ANY COST OVERRUNS ASSOCIATED 11
WITH THE QUALIFYING SYSTEM , SMALL HYDROELECTRIC SYSTEM, OR WIND SYSTEM; 12
(5) REQUIRE THAT ANY DEB T INSTRUMENT ISSUED IN CONNECTION 13
WITH THE QUALIFYING SYSTEM , SMALL HYDROELECTRIC SYSTEM, OR WIND SYSTEM 14
INCLUDE LANGUAGE SPE CIFYING THAT THE DEB T INSTRUMENT DOES NO T 15
ESTABLISH A DEBT , AN OBLIGATION, OR A LIABILITY OF THE STATE; AND 16
(6) REQUIRE THAT THE OWNER OR OPERATOR OF A QUALIFYING 17
SYSTEM, SMALL HYDROELECTRIC SYSTEM, OR WIND SYSTEM EXECU TE AND COMPLY 18
WITH A COMMUNITY BEN EFIT AGREEMENT UNDER § 7–1202 OF THIS SUBTITLE. 19
7–1217. 20
TO BE ELIGIBLE TO PAR TICIPATE IN THE COMPETITIVE PROCUREMENT 21
PROCESS UNDER THIS PART, A QUALIFYING SYSTEM , SMALL HYDROELECTRIC 22
SYSTEM, OR WIND SYSTEM SHALL : 23
(1) BE LOCATED IN THE STATE OR OTHERWISE DE MONSTRATE AN 24
ABILITY TO ADDRESS T HE RESOURCE ADEQUACY NEEDS OF THE STATE; 25
(2) BE ELIGIBLE FOR INCLUSI ON IN MEETING THE RENEW ABLE 26
ENERGY PORTFOLIO STA NDARD UNDER § 7–703(B) OF THIS TITLE; AND 27
(3) FOR SMALL HYDROELECT RIC SYSTEMS: 28
(I) HAVE A GENERATING CA PACITY OF LESS THAN 30 29
MEGAWATTS ; AND 30
32 HOUSE BILL 398
(II) BE LICENSED O R EXEMPT FROM LICENSIN G BY THE 1
FEDERAL ENERGY REGULATORY COMMISSION. 2
7–1218. 3
UNLESS EXTENDED BY MU TUAL CONSENT OF THE PARTIES, THE COMMISSION 4
SHALL APPROVE , CONDITIONALLY APPROV E, OR DENY A PROCUREMENT UNDER 5
THIS PART WITHIN 180 DAYS AFTER THE CLOSE OF A SOLICITATION PE RIOD. 6
7–1219. 7
(A) FOR THE PROCUREMENT P ROCESS ESTABLISHED U NDER THIS PART , BY 8
REGULATION OR ORDER , THE COMMISSION SHALL : 9
(1) ESTABLISH AN SREC–II AND REC–II PURCHASER ’S OBLIGATION 10
FOR SREC–II AND REC–II PURCHASERS TO PURCHA SE SREC–IIS AND REC–IIS 11
FOR EACH YEAR : 12
(I) ON A FORWARD –LOOKING BASIS; AND 13
(II) AT LEAST 1 YEAR BEFORE THE YEAR IN WHICH TH AT 14
SREC–II AND REC–II PURCHASE OBLIGAT ION BECOMES EFFECTIVE TO ALLOW AN 15
ELECTRIC COMPANY TO REFLECT SREC–II AND REC–II COSTS AS A 16
NONBYPASSABLE SURCHA RGE PAID BY ALL DIST RIBUTION CUSTOMERS O F THE 17
ELECTRIC COMPANY ; 18
(2) ESTABLISH A NONBYPAS SABLE SURCHARGE THAT ALLOWS AN 19
ELECTRIC COMPANY TO RECOVER ALL COSTS ASSO CIATED WITH THE PURC HASE OF 20
SREC–IIS AND REC–IIS FROM ALL DISTRIBUT ION CUSTOMERS OF THE ELECTRIC 21
COMPANY; 22
(3) ESTABLISH AN ESCROW ACCOUNT THAT IS UNDER THE 23
SUPERVISION OF THE REC ESCROW ADMINISTRATOR ; AND 24
(4) DIRECT THE ELECTRIC COMPANIES, IN CONSULTATION WITH THE 25
COMMISSION, TO JOINTLY SELECT A REC ESCROW ADMINISTRATOR . 26
(B) (1) EACH ELECTRIC COMPANY SHALL PROCURE FROM T HE ESCROW 27
ACCOUNT ESTABLISHED BY REGULATION OR ORDER UNDER THIS SECTION T HE 28
NUMBER OF SREC–IIS AND REC–IIS REQUIRED TO SATISFY THE SREC–II AND 29
REC–II PURCHASER ’S OBLIGATIONS. 30
HOUSE BILL 398 33
(2) SUBJECT TO ANY ESCROW ACCOUNT RESERVE REQU IREMENT THE 1
COMMISSION ESTABLISHE S: 2
(I) IF THERE ARE INSUFFICIENT SREC–IIS OR REC–IIS 3
AVAILABLE TO SATISFY THE ELECTRI C COMPANIES ’ SREC–II AND REC–II 4
PURCHASER ’S OBLIGATION , THE OVERPAYMENT SHAL L BE DISTRIBUTED TO 5
ELECTRIC COMPANIES T O BE REFUNDED OR CRE DITED TO EACH DISTRI BUTION 6
CUSTOMER BASED ON TH E CUSTOMER ’S CONSUMPTION OF ELE CTRICITY SUPPLY 7
THAT IS SUBJECT TO T HE RENEWABLE ENERGY PORTFOLIO STA NDARD; AND 8
(II) THE CALCULATION OF A N ELECTRIC COMPANY ’S SREC–II 9
AND REC–II PURCHASE OBLIGATION SHALL BE BASED ON FI NAL ELECTRICITY 10
SALES DATA AS REPORT ED BY PJM INTERCONNECTION AS MEASURED AT THE 11
CUSTOMER’S METER. 12
(3) FOR EACH SREC–II AND REC–II FOR WHICH A QUALIFYING 13
SYSTEM, SMALL HYDROELECTRIC SYSTEM, OR WIND SYSTEM RECEIVES PAYMENT , 14
THE QUALIFYING SYSTEM , SMALL HYDROELECTRIC SYSTEM, OR WIND SYSTEM 15
SHALL: 16
(I) SELL ALL ENERGY , CAPACITY, AND ANCILLARY SERVIC ES 17
ASSOCIATED WITH THE CREATION OF THE SREC–IIS OR REC–IIS INTO THE 18
MARKETS OPERATED BY PJM INTERCONNECTION ; AND 19
(II) DISTRIBUTE THE PROCE EDS RECEIVED FROM TH E SALES 20
UNDER ITEM (I) OF THIS PARAGRAPH TO ELECTRIC COMPANIES T O BE REFUNDED 21
OR CREDITED TO EACH DISTRIBUTION CUSTOMER BASED ON THE CUSTOMER ’S 22
CONSUMPTION OF ELECT RICITY SUPPLY THAT I S SUBJECT TO THE RENEWABLE 23
ENERGY PORTFOLIO STA NDARD. 24
7–1220. 25
BY REGULATION OR ORDE R, THE COMMISSION SHALL SPEC IFY THE 26
TRANSFER AND EXPIRAT ION OF SREC–IIS AND REC–IIS CREATED BY QUALIFYING 27
SYSTEMS, SMALL HYDROELECTRIC SYSTEMS, OR WIND SYSTEMS IN E XCESS OF THE 28
ESTABLISHED SREC–II OR REC–II PRICING SCHEDULE . 29
7–1221. 30
A DEBT, AN OBLIGATION, OR A LIABILITY OF A QUALI FYING SYSTEM, SMALL 31
HYDROELECTRIC SYSTEM , OR WIND SYSTEM OR OF AN OWNER OR OPERATOR OF A 32
QUALIFYING SYSTEM , SMALL HYDROELECTRIC SYSTEM, OR WIND SYSTEM MAY N OT 33
BE CONSIDERED A DEBT , AN OBLIGATION, OR A LIABILITY OF THE STATE. 34 34 HOUSE BILL 398
Article – State Finance and Procurement 1
13–102. 2
(a) The following procurement methods are authorized at the procurement 3
officer’s discretion, where applicable: 4
(1) competitive sealed bids under § 13–103 of this subtitle; 5
(2) competitive sealed proposals under § 13–104 or § 13–105 of this 6
subtitle; 7
(3) noncompetitive negotiation under § 13–106 of this subtitle; 8
(4) sole source procurement under § 13–107 of this subtitle; 9
(5) emergency or expedited procurement under § 13–108 of this subtitle; 10
(6) small procurement under § 13–109 of this subtitle; 11
(7) an intergovernmental cooperative purchasing agreement under § 12
13–110 of this subtitle; 13
(8) auction bids under § 13–111 of this subtitle; 14
(9) architectural, engineering, and land surveying services qualification 15
based selection under § 13–112 of this subtitle; 16
(10) master contracting under § 13–113 of this subtitle; [or] 17
(11) pay–for–success contracting under § 13–112.1 of this subtitle; OR 18
(12) LEGISLATIVE FAST –TRACK PROCUREMENTS UNDER § 13–117 OF 19
THIS SUBTITLE. 20
13–117. 21
(A) IT IS THE INTENT OF T HE GENERAL ASSEMBLY TO: 22
(1) RECOGNIZE THE NEED F OR STATE AGENCIES TO BE RESPONSIVE 23
TO THE REQUESTS AND LEGISLATIVE DIRECTIV ES OF THE GENERAL ASSEMBLY; 24
(2) REDUCE THE TIME IT T AKES FOR STATE AGENCIES TO PRO CURE 25
CONSULTANTS TO ASSIS T WITH LEGISLATIVE M ANDATES THAT HAVE DEADLINES 26
SPECIFIED IN LAW; AND 27 HOUSE BILL 398 35
(3) BE TIMELY IN ADDRESS ING CLIMATE CHANGE , ENVIRONMENTAL , 1
ENERGY, AND GREENHOUSE GAS E MISSIONS RELATED ISS UES. 2
(B) THIS SECTION APPLIES ONLY TO THE PROCUREMENT OF CONSU LTANTS 3
THAT: 4
(1) ARE LEGISLATIVE LY MANDATED WITH SPECIF IC TIME FRAMES 5
ESTABLISHED IN LAW ; AND 6
(2) WILL ADDRESS ISSUES RELAT ED ONLY TO CLIMATE CHANGE , 7
ENVIRONMENTAL , ENERGY, AND GREENHOUSE GAS E MISSIONS. 8
(C) THE FOLLOWING UNITS ARE AUTHORIZED TO IS SUE COMPETITIVE 9
SEALED BIDS HIGHER T HAN THEIR DESIGNATED SMALL PROCUREMENT 10
DELEGATION AUTHORITI ES: 11
(1) THE PUBLIC SERVICE COMMISSION; 12
(2) THE OFFICE OF PEOPLE’S COUNSEL; 13
(3) THE MARYLAND ENERGY ADMINISTRATIO N; 14
(4) THE DEPARTMENT OF THE ENVIRONMENT ; AND 15
(5) THE DEPARTMENT OF NATURAL RESOURCES. 16
(D) BEFORE AWARDING A PRO CUREMENT CONTRACT UN DER THIS SECTION , 17
THE PROCUREMENT OFFI CER SHALL OBTAIN THE APPROVAL OF : 18
(1) THE HEAD OF THE UNIT ; AND 19
(2) THE CHIEF PROCUREMENT OFFICER, OR THEIR DESIGNEE . 20
(E) (1) THE CHIEF PROCUREMENT OFFICER, OR THEIR DESIGNEE , 21
SHALL APPROVE A PROCUREMENT CONTRA CT SUBMITTED UNDER THIS SECTION IF 22
IT COMPLIES WITH THE REQUIREMENTS OF THIS SECTION. 23
(2) IF THE CHIEF PROCUREMENT OFFICER, OR THEIR DESIGNEE , 24
DOES NOT APPROVE A PROCUREMENT CONTRA CT SUBMITTED UNDER THIS SECTION 25
WITHIN 5 BUSINESS DAYS AFTER RECEIVING THE CONTRACT, THE CONTRACT SHALL 26
BE CONSIDERED APPROV ED. 27
36 HOUSE BILL 398
Article – State Government 1
9–20B–05. 2
(a) There is a Maryland Strategic Energy Investment Fund. 3
(e) The Fund consists of: 4
(1) all of the proceeds from the sale of allowances under § 2–1002(g) of the 5
Environment Article; 6
(2) money appropriated in the State budget to the Program; 7
(3) repayments and prepayments of principal and interest on loans made 8
from the Fund; 9
(4) interest and investment earnings on the Fund; 10
(5) compliance fees paid under [§ 7–705] § 7–705(B–1) of the Public 11
Utilities Article; 12
(6) money received from any public or private source for the benefit of the 13
Fund; 14
(7) money transferred from the Public Service Commission under § 15
7–207.2(c)(3) of the Public Utilities Article; and 16
(8) money distributed under § 2–614.1 of the Tax – General Article. 17
[(g–1) Proceeds received by the Fund from compliance fees under § 7–705(b)(2)(i)2 of 18
the Public Utilities Article shall be allocated as follows: 19
(1) beginning in fiscal year 2025, at least 20% of the proceeds shall be used 20
to provide grants to support the installation of new solar energy generating systems under 21
the Customer–Sited Solar Program; 22
(2) up to 10% of the proceeds shall be credited to an administrative expense 23
account for costs related to the administration of the Fund; 24
(3) proceeds collected but unused from a previous year shall be used before 25
proceeds allocated for the current year; and 26
(4) the Administration shall reallocate to other authorized uses any 27
proceeds that are not used within 3 fiscal years after collection.] 28
[(i) (1) Except as provided in paragraph (2) of this subsection, compliance fees 29
paid under § 7–705(b) of the Public Utilities Article may be used only to make loans and 30 HOUSE BILL 398 37
grants to support the creation of new Tier 1 renewable energy sources in the State that are 1
owned by or directly benefit: 2
(i) low– to moderate–income communities located in a census tract 3
with an average median income at or below 80% of the average median income for the State; 4
or 5
(ii) overburdened or underserved communities, as defined in § 1–701 6
of the Environment Article. 7
(2) Compliance fees paid under § 7–705(b)(2)(i)2 of the Public Utilities 8
Article shall be accounted for separately within the Fund and may be used only to make 9
loans and grants to support the creation of new solar energy sources in the State that are 10
owned by or directly benefit: 11
(i) low– to moderate–income communities located in a census tract 12
with an average median income at or below 80% of the average median income for the State; 13
(ii) overburdened or underserved communities, as defined in § 1–701 14
of the Environment Article; or 15
(iii) households with low to moderate income, as defined in § 9–2016 16
of this title.] 17
[(i–1)] (I) (1) (i) In this subsection the following words have the meanings 18
indicated. 19
(ii) “Area median income” has the meaning stated in § 4–1801 of the 20
Housing and Community Development Article. 21
(iii) “Low and moderate income” means having an annual household 22
income that is at or below 120% of the area median income. 23
(2) Compliance fees paid under § 7–705(b–1) of the Public Utilities Article 24
shall be accounted for separately within the Fund and may be used only to make loans and 25
grants to promote increased opportunities for the growth and development of small, 26
minority, women–owned, and veteran–owned businesses in the State that install 27
geothermal systems in the State. 28
Article – Tax – General 29
2–1201. 30
(A) IN THIS SECTION , “QUALIFIED DATA CENTE R” HAS THE MEANING 31
STATED IN § 11–239 OF THIS ARTICLE. 32
38 HOUSE BILL 398
(B) The Comptroller shall pay refunds relating to the public service company 1
franchise tax from the General Fund of the State. 2
(C) THE COMPTROLLER SHALL DIS TRIBUTE 75% OF THE FRANCHISE TAX 3
REVENUE FROM PUBLIC SERVICE COMPANIES IMPOSED UNDER § 8–402.1 OF THIS 4
ARTICLE, THAT IS ATTRIBUTABLE TO THE KILOWATT –HOURS OF ELECTRICITY 5
DELIVERED TO QUALIFI ED DATA CENTERS THAT ARE OPERATIONAL ON O R AFTER 6
JANUARY 1, 2026, TO THE ESCROW ACCOUN T ESTABLISHED BY THE PUBLIC 7
SERVICE COMMISSION UNDER § 7–705 OF THE PUBLIC UTILITIES ARTICLE. 8
2–1302.5. 9
(A) IN THIS SECTION , “QUALIFIED DATA CENTE R” HAS THE MEANING 10
STATED IN § 11–239 OF THIS ARTICLE. 11
(B) THE COMPTROLLER SHALL DIS TRIBUTE 75% OF THE SALES AND USE 12
TAX REVENUES ATTRIBU TABLE TO THE SALE OF ELECTRICITY DELIVERED TO 13
QUALIFIED DATA CENTE RS THAT ARE OPERATIO NAL ON OR AFTER JANUARY 1, 2026, 14
TO THE ESCROW ACCOUN T ESTABLISHED BY THE PUBLIC SERVICE COMMISSION 15
UNDER § 7–705 OF THE PUBLIC UTILITIES ARTICLE. 16
2–1303. 17
After making the distributions required under §§ 2–1301 through [2–1302.4] 18
2–1302.5 of this subtitle, the Comptroller shall pay: 19
(1) revenues from the hotel surcharge into the Dorchester County 20
Economic Development Fund established under § 10–130 of the Economic Development 21
Article; 22
(2) to the Blueprint for Maryland’s Future Fund established under § 5–206 23
of the Education Article, the following percentage of the remaining sales and use tax 24
revenues: 25
(i) for fiscal year 2023, 9.2%; 26
(ii) for fiscal year 2024, 11.0%; 27
(iii) for fiscal year 2025, 11.3%; 28
(iv) for fiscal year 2026, 11.7%; and 29
(v) for fiscal year 2027 and each fiscal year thereafter, 12.1%; and 30
HOUSE BILL 398 39
(3) the remaining sales and use tax revenue into the General Fund of the 1
State. 2
11–239. 3
(a) (1) In this section the following words have the meanings indicated. 4
(2) “Data center” means a building or group of buildings used to house 5
computer systems, computer storage equipment, and associated infrastructure that 6
businesses or other organizations use to organize, process, store, and disseminate large 7
amounts of data. 8
(5) (i) “Qualified data center” means a data center located in the State 9
in which an individual or a corporation, within 3 years after submitting an application for 10
the sales and use tax exemption under this section, has: 11
1. for a data center located within a Tier I area, invested at 12
least $2,000,000 in qualified data center personal property and created at least five 13
qualified positions; or 14
2. for a data center located in any other area of the State, 15
invested at least $5,000,000 in qualified data center personal property and created at least 16
five qualified positions. 17
(ii) “Qualified data center” includes: 18
1. a data center that is a co–located or hosting data center 19
where equipment, space, and bandwidth are available to lease to multiple customers; and 20
2. an enterprise data center owned and operated by the 21
company it supports. 22
SECTION 2. AND BE IT FURTHER ENACTED, That the General Assembly 23
supports the extension or renewal of the Federal Nuclear Regulatory Commission license 24
for the Calvert Cliffs Nuclear Power Plant’s nuclear reactors in the years 2034 and 2036. 25
SECTION 3. AND BE IT FURTHER ENACTED, That a presently existing obligation 26
or contract right may not be impaired in any way by this Act. 27
SECTION 4. AND BE IT FURTHER ENACTED, That this Act shall take effect June 28
1, 2025. 29